Decentralized finance (DeFi) is a kind of independent and interconnected financial services pool that is built with the help of smart contracts and blockchain technology.
DeFi is not a token or crypto wallet, but rather a decentralized finance concept, an ecosystem where blockchains and digital assets are integrated with traditional financial institutions. The decentralized financing system’s relevance grows rapidly in 2020. And the reason for this serious problem is the global financial systems issues due to the Covid-19 pandemic.
DeFi is seen as an alternative to fiat monetary policy. The only difference with DeFi is that the entire system is decentralized, which means that banks or central authorities don’t control it.
What are DeFi projects?
Any decentralized commercial financial service can be considered a DeFi project.
Projects are not managed by any particular organization or its employees. Instead, the rules of operation are written in code or smart contracts. The code is transparent, everyone can track the details of ongoing transactions.
Benefits of decentralized finance:
- Autonomy. Only you possess your money and assets in the DeFi ecosystem. No one can block your account or seize assets and block transactions.
- Decentralization. There is no need for intermediaries. Transactions are carried out directly.
- The transactions are fast and inexpensive.
- Secure private key.
- The ecosystem’s transparency where personal interests are governed by a transparent protocol.
- Single points of failure are eliminated. Data is written to the blockchain and distributed across thousands of nodes, making it nearly impossible to shut down services.
Where DeFi Projects Are Applied?
- Creation of monetary banking services (for example, issuing stable coins).
- Providing peer-to-peer or pooled lending and borrowing platforms.
- Leveraging advanced financial instruments, tokenization platforms, derivatives, and forecast markets.
Key Features of DeFi dApp
- Decentralized P2P channel.
- The dApp user connects his crypto wallet to the decentralized blockchain network.
- Assets are 100% protected and there is no user asset manager.
- All transactions, application processes are processed by smart contracts, the participation of a third party is excluded.
- No access restrictions.
Popular DeFi Projects?
- Open lending protocols
- Exchanges and open trading floors.
What to Do with DeFi. How to Get Started?
- Buy cryptocurrency on the fiat currency exchange.
- Create a software wallet to store your cryptocurrency.
- Transfer your digital assets from the exchange to a crypto wallet.
- Transfer your cryptocurrency from your wallet to a crypto bank and receive the interest.
To start buying any DeFi token, you need a cryptocurrency and a crypto wallet.
Use GetBloсk, a complete solution for accessing full nodes of over 30 popular cryptocurrencies to enter DeFi projects.
Launch your wallet, exchange cryptocurrencies at minimal cost, track the dynamics of the crypto market with Explorer with the GetBlock platform.
Originally published at https://getblock.io on November 5, 2020.